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Starbright Company's CEO, commented that the return from holding cash is zero or very low. He wanted the finance manager to reduce the level of
Starbright Company's CEO, commented that the return from holding cash is zero or very low. He wanted the finance manager to reduce the level of cash holding from the current $200,000 to only $10,000. (i) Advise the CEO on the THREE (3) reasons why a firm needs to hold cash. (3 marks) (ii) Suggest an alternative where the firm can increase its returns and yet meet its liquidity requirements. Explain
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